What Is File Encryption, and How Secure Is It?

In 2014, one disgruntled employee wreaked havoc on his former employer. With the help of old login credentials, the worker was able to access the company’s file server and create costly delays — $1.1 million worth — for his former employer, Georgia-Pacific.

What could have prevented the damage? Besides better access controls, a more robust file encryption solution would have helped to protect the company’s infrastructure from its admin access.

Understanding how encryption works isn’t just for tech experts — it’s essential knowledge for anyone trying to protect sensitive data. In this guide, we’ll break down:

What file encryption actually involves,
The nuts and bolts of how it works,
Who needs to seriously consider encrypting their files (spoiler: probably you),
The real-world strengths and limitations of file encryption, including how it handles threats like ransomware and quantum computing, and
How to choose the right encryption solution for your organization.

Ready to learn how file encryption keeps your sensitive data safe and secure? Let’s dive in.

What is file encryption?

File encryption is a security measure that converts regular, readable data (called plaintext) into a scrambled, unreadable format (called ciphertext) to protect it from unauthorized access. It serves as a fundamental building block of digital security, underpinning everything from online purchases to company emails.

Organizations and individuals use encryption for three primary reasons: privacy, security, and compliance. Today, the vast majority of apps and file systems use encryption to keep sensitive information confidential, protect against hackers, and meet legal requirements for safeguarding certain types of sensitive data.

What does it mean to encrypt a file?

When you encrypt a file, you’re essentially running it through a complex mathematical process that transforms every bit of data within that file into a seemingly random sequence of characters. The process ensures that, even if someone manages to get their hands on your encrypted files, they’ll see nothing but gibberish without the proper decryption key.

For example, if you encrypt a simple text file containing the message “Meeting at 2 PM,” it might look something like “X7#mK9$pL*vQ2” after encryption. The same process happens whether you’re encrypting a single line of text or something much longer, like a video, a financial spreadsheet, or a folder of documents containing sensitive business information.

Once it’s encrypted, the file remains in its protected state until someone with the correct key decrypts it back to its original, readable form. This process ensures that encrypted data stays private and secure, whether it’s stored on a computer, transmitted over the internet, or backed up in the cloud.

How does file encryption work?

At its core, file encryption works via advanced algorithms that use complex mathematical functions to transform your data and via encryption keys, unique strings of bits that act like a digital password. The strength of the file encryption largely depends on both the algorithm used and the length of the encryption key.

During the encryption process, the algorithm takes two inputs: the original file and the encryption key. It then processes these together through multiple rounds of mathematical operations to produce the encrypted file.

Today, most operating systems have built-in encryption features to protect data at rest. (On Windows, it’s BitLocker; on macOS, it’s FileVault. Apple and Android phones also have their own built-in features.) But data in motion still requires additional security measures to protect it as it travels across networks.

Unfortunately, most encryption at rest only protects against the physical theft of the system. (For instance, if someone wheels in a cart and steals a server from the rack.) File encryption offers a solution. It’s what allows data to be secured independently of its infrastructure — meaning that data remains uncompromised even if an admin credential is compromised.

Common types of file encryption

Modern file encryption generally falls into two main categories, symmetric and asymmetric.

Symmetric Encryption

Also known as private key encryption, symmetric encryption uses the same key to both encrypt and decrypt the file. Think of it like your standard front door lock — the same key will work to both lock and unlock it.

Symmetric encryption is faster and uses less computing power than asymmetric encryption, making it ideal for encrypting large files or when quick access is needed. However, it’s also considered less secure, so its speed and efficiency come at a price.

Popular symmetric encryption algorithms include:

AES (Advanced Encryption Standard, a block cipher)
RC4, RC5, and RC6 (stream ciphers)
DES (Data Encryption Standard)
Blowfish
And more

Asymmetric Encryption

Asymmetric encryption is also known as public key encryption, and it uses two mathematically related keys: a public key for encryption and a private key for decryption. It’s a little like a mailbox where anyone can drop in mail (encrypt with the public key), but only the owner can open it and retrieve the contents (decrypt with the private key).

While slower than symmetric encryption, the asymmetric method offers better file security. It’s particularly useful for software programs that need to validate a digital signature or establish a secure connection over an insecure network.

Popular Asymmetric encryption algorithms include:

RSA (Rivest Shamir Adleman)
DSS (the Digital Signature Standard)
ECC (Elliptic Curve Cryptography)

Who needs file encryption?

File encryption isn’t just for tech experts or large corporations. It’s becoming increasingly essential for anyone who stores or shares sensitive information digitally. It’s also widespread across industries, from healthcare — where it protects patient medical records and ensures HIPAA compliance — to tech, finance, and even manufacturing.

For most businesses, the need for encryption is quite clear. Encryption can help with:

Protecting client information and confidential business documents
Safeguarding research, IP, and trade secrets
Ensuring compliance with data protection regulations like the GDPR and CCPA
Keeping financial records and employee data private

But individual users also benefit from using file encryption. It helps protect their personal photos and documents, safeguard private emails, secure financial information like tax returns and bank statements, and more.

The reality is that nearly everyone has sensitive files that could be valuable to cybercriminals or harmful if exposed. If you store any private information digitally — whether personal or professional — file encryption adds a crucial layer of security to your digital life.

How secure is file encryption, really?

The good news first: File encryption remains one of the most robust security measures available today. When implemented correctly with strong standards like AES, it would take literally thousands to billions of years for traditional computers to break through by brute force. This makes properly encrypted files virtually impenetrable using current technology. (We’ll discuss one important caveat below.)

That said, file encryption can’t protect against every cyber threat. It’s generally adept at preventing unauthorized access to data, securing sensitive information from data breaches, maintaining confidentiality, and ensuring compliance with data protection regulations. But it has several real limitations, including:

Vulnerability to ransomware
Endpoint agent requirements
The quantum computing threat

Vulnerability to ransomware

While encryption protects data from unauthorized access, it doesn’t provide the kind of data resilience needed to withstand ransomware attacks. That’s because ransomware can still encrypt your already-encrypted files with the attacker’s new key, effectively locking you out of your own data.

While file encryption does mitigate the data exfiltration component of double extortion ransomware attacks, it shouldn’t be used as a standalone ransomware protection solution. Instead, organizations must turn to platforms that provide both encryption and resilience to secure data and safeguard sensitive information.

Encrypting files in large repositories

Encrypting files in large repositories presents additional challenges. Organizations today have to manage massive file repositories spanning terabytes or even petabytes of information, distributed across on-prem servers, cloud storage, and hybrid or multi-cloud environments.

The sheer scale of these repositories means that traditional encryption approaches can quickly become computationally expensive and slow down critical business operations. It also means that vulnerabilities like infrastructure admin access can become more difficult to manage — or even spot. Each user introduces a potential security risk, and managing encryption keys becomes a critical challenge.

The quantum computing threat

Looking ahead, quantum computing poses a significant threat to current encryption methods. As we discussed in our recent blog post, quantum computers could potentially break many of today’s encryption algorithms in hours rather than millennia — and a team of Chinese researchers has already made a convincing start at demonstrating attackers’ tactics.

To avoid the havoc caused by quantum computing and Harvest Now, Decrypt Later threats, organizations should begin to consider quantum-resistant encryption solutions. This will be particularly essential for organizations handling large amounts of sensitive data or subject to long data retention periods.

How to choose the right file encryption solution

There’s no one-size-fits-all encryption system that will meet every organization’s needs. But here are several considerations that can help guide your company in choosing the right encryption software.

The first step is to assess your organization’s needs. What types of individual files need to be protected, and how often will employees need access to them? Additionally, what kind of compliance requirements, if any, does your company need to meet?

You’ll also want to think about the implementation process. How will users be trained on the new software? What policies, procedures, and updates will be required to ensure that the solution keeps your company secure and compliant?

This is especially important because the best encryption solution is one that people will actually use consistently. A complex system that requires a total overhaul of employee workflows won’t be helpful if it’s too cumbersome to actually use.

Lastly, it’s important to remember that not all encryption algorithms are created equal. Your file encryption system should meet the cryptographic standards set by trusted authorities like the National Institute of Standards and Technology (NIST).

It should also offer:

An easy-to-use interface with minimal changes to user workflows
Strong encryption standards (AES-256 at minimum)
Secure key management systems
Robust data resilience

Ultimately, the right file encryption solution will balance data security, resilience, and usability.

Advanced file encryption with ShardSecure

ShardSecure offers an advanced file encryption solution that protects sensitive data at rest while avoiding performance hits. Our technology allows organizations to secure their data from internal and external threats without the cost and complexity of agent-based encryption solutions.

The ShardSecure platform provides strong data resilience and an easy plug-and-play implementation. The solution also: